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Property And Casualty > Exam > Flashcards

Exam Flashcards

0
Q

A beauty parlor burns to the ground. What type of loss is this to the owner?

A

Direct loss

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1
Q

What is the age requirement to be licensed in the state of Minnesota

A

18

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2
Q

A business owners policy is

A

A self-contained complete package policy

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3
Q

A health plan policy cannot be issued or delivered in Minnesota until what has been filed with the Commissioner

A

Both risk classification and premium rates

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4
Q

A participating insurance policy will

A

Pay dividends to the policy holder

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5
Q

A person who is not named as an insured on the declarations page of a policy but is protected by the policy, usually in regard to a specific interest is known as

A

An additional insured

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6
Q

The policy holder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler, $50,000 damage to the insured’s building, and $30,000 of expediting expenses, how much will the insured collect

A

$175,000. There is a limit of $25,000 for expediting expenses

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7
Q

A policy is comprised of

A

Declarations page, conditions, interline endorsements and coverage parts

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8
Q

A structure rented to a neighbor for use as a private garage would be covered under what coverage in a dwelling policy

A

Coverage B other structures

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9
Q

An individual’s construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could the individual use to insure it

A

Contractors equipment floater

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10
Q

An insured condominium owner wants to purchase fire and extended coverage for personal property liability coverage for himself and his family members. He should purchase

A

HO-6 condominium owners

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11
Q

An insured works outside the home. His sister lives with him and cares for his 4 children. When his home is severely damaged by fire, they move in to an apartment. The largest apartment available is a 2 bedroom so the sister stays at a motel. How much will HO-3 pay for their living expenses .

A

All expenses up to the Coverage D limit

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12
Q

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. What has the insurer violated

A

Consideration

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13
Q

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered

A

An authorized insurer

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14
Q

Before the insurer will pay any loss under a policy, what is the insured usually required to produce

A

Proof of loss form

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15
Q

Besides earthquakes which peril is covered by the earthquake cause of loss form under a commercial property policy

A

Volcanic eruptions

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16
Q

Broad theft coverage can be added as an endorsement to a dwelling policy if

A

The insured is the owner-occupant of the dwelling

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17
Q

Burglary is defined as

A

The taking of property from within a premises leaving visible signs of forced entry

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18
Q

Equipment breakdown coverage is written with a single limit of insurance per accident. However, what is the sublimit for hazardous substance cleanup, or repair or replacement of contaminated property

A

$25,000

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19
Q

Homeowners policies provide coverage for $2,500 for what

A

Business property while on the residence premises

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20
Q

How does a mobile home endorsement affect the other coverage of law or ordinance in a homeowners policy

A

It removes the coverage

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21
Q

How long is the waiting period after the application has been accepted before flood coverage goes into effect

A

30 days

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22
Q

If an insurer meets all the requirements, their Certificate of Authority should arrive within how many days of applying

A

60 days

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23
Q

In life insurance, producers are permitted to share or split commissions provided that

A

Both are properly licensed in that line of insurance

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24
Q

In property insurance actual cash value is defined as

A

Replacement cost less depreciation

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25
Q

In terms of parties to a contract, what is not a prerequisite for a competent party

A

Having completed secondary education

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26
Q

Individuals in the business of selling construction equipment and mobile equipment should insure with an

A

Equipment dealers coverage

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27
Q

Is a mudslide caused by accumulations of water under ground covered by flood insurance

A

Yes

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28
Q

Is the insurance provided by the National Flood Insurance also available in standard property policies

A

No

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29
Q

Is workers compensation an optional coverage available in a BOP

A

No it is a different type of insurance

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30
Q

Liberalization clause states that

A

If the insurer adopts any changes that broaden coverage in the policy, those changes will automatically apply to the policy at no additional premium

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31
Q

Once an individual is licensed for life or accident and health insurance how many hours of training must they complete to sell long term care insurance

A

8 hours

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32
Q

Permitted incidental occupancies covers liability exposures arising from

A

An incidental business conducted within a building on the residence premises

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33
Q

Section 1 of a homeowners policy provides coverage for

A

Personal property, dwellings, and other structures

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34
Q

The BOP (business owners policy) is most similar to

A

Homeowners

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35
Q

The extra expense coverage form provides

A

Coverage that will permit the insured to continue in business without interruption following a property damage loss

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36
Q

Which part of the insurance policy covers claims related expenses, reasonable expenses in cured by an insured to protect damaged property from further loss, or defense expenses

A

Additional coverage

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37
Q

The endorsement that can be attached to an equipment breakdown policy to provide coverage for perishable property for spoilage or damage caused by contact with refrigerant is called

A

Refrigeration interruption

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38
Q

What is the minimum property requirement

A

$50,000

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39
Q

Who must participate in the WYO program

A

Private insurers that wish to write and service National Flood Insurance policies on a no risk basis

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40
Q

When the FAIR Plan receives an application, it must take action to accept or reject within

A

59 days

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41
Q

An endorsement is available for hired and nonowned auto on BOP liability

A

Only if the insured does not have commercial auto coverage

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42
Q

How are the 3 applicable percentages of extra expenses applied

A

30 days or less- 1st percentage, 30-60 days - 2nd percentage, more than 60 days - 3rd percentage

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43
Q

Who must participate in the FAIR Plan

A

All insurers licensed to write property insurance in Minnesota

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44
Q

What is the closest term to an “authorized” insurer

A

Admitted

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45
Q

Which method of loss valuation is contrary to the basic concept of indemnity

A

Replacement cost

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46
Q

In return for premium an insurance company must

A

Be fair in underwriting and pay covered losses

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47
Q

If more than one policy is in force and covering the same risk at the time of loss, which provision defines how each policy will respond

A

Other insurance

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48
Q

This state provided for temporary license for

A

Producers time in the military, producers death, producers disability

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49
Q

Is explosion of steam boilers covered in equipment breakdown basic policy

A

Yes

50
Q

Is the loss of a coin collection valued at $500 lost in a fire covered in a homeowners policy

A

No

51
Q

Is breakage of glass covered in the basic form dwelling policy

A

No

52
Q

In disability income insurance, a deductible stated in days not dollars is known as

A

Elimination period

53
Q

A single dollar limit of liability applying to the total of damages for bodily injury and property damage combined resulting from one accident is

A

Combined single limit

54
Q

The crime of forced entry into the premises of another by a person or persons with felonious intent is

A

Burglary

55
Q

What is a mandatory part of a policy that varies with each individual policy

A

Declarations

56
Q

Is theft covered in the broad form dwelling policy

A

No

57
Q

Is more than the average amount of claims in a single policy term grounds for the insurer to cancel the policy

A

No

58
Q

Is the insurer required to notify the insured of financial difficulty

A

No

59
Q

Consideration on the part of the insured is

A

Payment of premiums and health representations in the application

60
Q

What are commercial lines for

A

Corporations and businesses

61
Q

A policy condition that states if a policy is broadened with no additional premium, then the expanded coverage automatically applies to all policies of the same type is known as

A

Liberalization clause

62
Q

True or False. A purpose of the FAIR Plan is to encourage purchase of property and liability insurance from normal insurers

A

False

63
Q

When transacting business in this state an insurer formed under the laws of another country is known as

A

An alien insurer

64
Q

When doing business in this state an insurance company that is formed under the laws of another state is known as

A

Foreign insurer

65
Q

The limited fungi, wet or dry rot, or bacteria coverage endorsement applies to what types of losses

A

Property and liability

66
Q

In insurance an offer is usually made when

A

The application is submitted

67
Q

What are grounds for a commissioner to suspend, revoke, or deny a license

A

Determines the licensee does not intend or is not in good faith carrying on business, violation or failure to comply with any order of the insurance regular of any other state or jurisdiction, misrepresents the terms of any insurance contract

68
Q

What term describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance

A

Defamation

69
Q

The homeowners policy that covers personal property but does not include the structure

A

HO-4 renters

70
Q

If during a sales presentation a producer intentionally makes a statement which may mislead the applicant, the producer committed

A

Misrepresentation

71
Q

The commercial property declarations page contains

A

Description of the property insured

72
Q

Robbery is

A

Taking of property by use of force, violence, or fear

73
Q

If a producers license lapses how much time do they have to apply for reinstatement without having to take an exam

A

12 months

74
Q

Which policies contain automatic reinstatement provisions

A

Business automobile liability, personal automobile liability with split limits, and homeowners

75
Q

When would misrepresentation be considered fraud

A

When it is intentional and material

76
Q

Policies issued by a township mutual May be cancelled by the insurer with

A

10 days notice

77
Q

What type of property insurance is available to businesses

A

Commercial lines

78
Q

Describe a valued policy law

A

In the event of a total loss the full policy limit must be paid

79
Q

An insured has $5,000 of medical coverage on a personal auto policy. The insured and 2 passengers are injured. Medical expenses for the insured are $7,000, $4,000 for 1 passenger and $8,000 for the other. How much wit ll the policy pay

A

$14,000. The limit is $5,000 per person per accident. The 1st passenger only needed $4,000

80
Q

When must a surcharge disclosure statement be supplied to an applicant of auto insurance

A

Before the initial premium is paid

81
Q

What provision states what must be included for an insurance contract to be considered complete

A

The entire contract

82
Q

When would the UM coverage apply

A

Only when the other party is legally liable but has no insurance

83
Q

What kind of deductible is applied between basic coverage and major medical coverage

A

Corridor deductible

84
Q

Which section if the policy explains the rights and characteristics of the contract

A

Provisions

85
Q

Which personal auto coverage would pay for the insured’s travel expenses and loss of earrings while involved in the settlement process of a covered loss

A

Liability coverage

86
Q

Which professional liability form provides form coverage for liability arising out of malpractice, error, or mistakes made in rendering professional services

A

Physicians, surgeons, and dentists malpractice

87
Q

The commissioner must examine the affairs and conditions of every insurer licensed in the state not less than frequently than

A

Every 5 years

88
Q

An insured purchased an insurance policy 5 years ago. Last year she received a dividend check from the insurance company that was not taxable. This year she did not receive a check. What type of insurance company did she purchase a policy from

A

Mutual

89
Q

When an employee is paid workers compensation benefits they are barred from bring legal action against their employer for further damages. This is known as

A

Exclusive remedy

90
Q

What is a method of claim settlement used when the insured and the insurer cannot agree on how to settle a claim

A

Arbitration

91
Q

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

A

The excess over self-insured retention

92
Q

In an auto policy, the medical payments coverage is similar to

A

Accident insurance, because it pays medical expenses regardless of fault

93
Q

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within

A

3 years

94
Q 
All of the following are considered parts of the policy structure EXCEPT
Provisions
Exclusions
Insuring clause
Conditions
A

Provisions

95
Q

Policies issued through the Minnesota Automobile Insurance Plan must provide liability limits of at least

A

30/60/10

96
Q

Insurance is a contract that protects the insured from what

A

Loss

97
Q

What is the purpose of the claims made form

A

To allow the insurer to determine adequate rates for unknown losses claimed in the future

98
Q

In a casualty policy, which policy provision states that the interest in a policy may be transferred

A

Assignment

99
Q

Explain split liability limits

A

Bodily injury per person/bodily injury per loss/property damage covered
Limits policies will pay in each

100
Q

Conditions or situations that increase the probability of an insured loss occurring

A

Hazard

101
Q

Sudden unplanned and unexpected event, not under the control of the insured, resulting in injury or damage that is neither expected nor intended

A

Accident

102
Q

Causes of loss by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither expected nor intended

A

Occurrence

103
Q

A temporary agreement issued by an agent or insurer providing temporary coverage until the policy can be issued

A

Binder

104
Q

The exact, direct, uninterrupted cause of loss is the

A

Proximate cause

105
Q

A scheduled personal property endorsement will be used to insure

A

Higher limits of coverage for fine arts items

106
Q

A company’s employee caused a loss. Which type of liability describes the company’s legal responsibility

A

Vicarious liability

107
Q 
For an additional premium the extended coverages written on the basic form dwelling policy would cover which of the following
Vandalism
Glass breakage
Fire
Riot
A

Riot

108
Q

What part of the insurance contract describes covered perils and the nature of coverage of the contractual agreement between insurer and insured

A

Insuring agreement

109
Q

An insured suffered a loss. In order to avoid having her claim denied, she must submit proof of loss within

A

1 year

110
Q

When does the federal emergency flood insurance program go into effect

A

When a community applies for the program

111
Q

Homeowners policies that have been in effect for no more than 60 days require how much notice of cancellation

A

20 days

112
Q

A company created a defective product. What term best describes the company’s legal responsibility

A

Strict liability

113
Q

Under the Garment Contractor Floater of an Inland Marine policy, coverage while the property is in transit between the insured and subcontractor is usually written on which basis

A

All-risk

114
Q

If an insurer participating in the WYO flood program pays more in flood claims than it has collected in flood premiums

A

The FIA pays back the difference

115
Q

In a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will

A

Reduce by 10%

116
Q

How many citizens who own at least $50,000 in property in adjoining townships may make up a township mutual

A

25

117
Q

A producer who failed to comply with the state continuing education requirement is guilty of a

A

Misdemeanor

118
Q

Which coverage is loss of use covered by

A

Coverage D

119
Q

A whole life policy that charges a level annual premium for the lifetime of the insured

A

Straight life

120
Q

Insurers cannot decline risk solely based on the presence of a day care operation that is caring for less than

A

5 children

121
Q

Explain split liability limits

A

Bodily injury per person/bodily injury per loss/ property damage covered
Example: 100/300/100

122
Q

Sections of a business owners policy

A

Section 1-property, section 2-liability

Property And Casualty (2 decks)

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